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A Tesla assembly line worker gets tips from a roving physical therapist at the company's Fremont, ... [+] California, plant.

Forbes via Matt Kang

Tesla delivered a record 97,000 electric sedans and crossovers to customers in the third quarter, led by the Model 3, a bit better than consensus expectations but falling short of the 100,000-unit mark CEO Elon Musk apparently hoped to achieve. The company’s shares dropped 4.2% in Thursday trading.

The three-month tally topped a previous record of 95,200 units delivered in the second quarter and was 16% above the year-earlier figure. The latest figures included a best-ever 79,600 units of the 3 sedan and a combined 17,400 of the pricier, higher-margin Model S sedan and X SUV, both of which have seen a significant sales decline in the past year. The average expectation for equity analysts tracking Tesla was quarterly deliveries of 94,422, according to Morgan Stanley’s Adam Jonas. Production for the quarter was a record 96,155.

Musk has said Tesla’s full-year deliveries will be between 360,000 and 400,000 units. So far it’s achieved 255,200, meaning fourth-quarter units will have to reach at least 105,000 to hit the lower end of its estimate. Last week, EV fansite Electrek said Musk told Tesla staff in an internal email that “we have a shot at achieving our first 100,000 vehicle delivery quarter,” but in a later post said the company would likely fall short of that.

The stock closed down $10.10 to $233.03 in Nasdaq trading in New York, and has declined 30%, or nearly $100, so far this year.

Tesla is “entering Q4 with an increase in our order backlog,” the company said. “As was also the case in Q2, nearly all of our Model 3 orders were received from customers who did not previously hold a reservation, solidifying the transition to generating strong organic demand. We are continuing to focus on increasing production to meet that demand.”

While sales growth for the Model 3, priced from about $40,000, has continued, analysts are concerned about weaker revenue and gross margins as Model S and X, which can both sell for more than $100,000, become a smaller part of Tesla’s business.

“Tesla management has targeted a long-term auto gross margin of 25% in a steady state ... but we left 2Q with the feeling that there was an increased dependence on (sales of the Full Self Driving feature) and regulatory credits to bridge the gap between the 18.9% gross margin they reported,” Jonas said in a research note. “We don't currently see scope for these to meaningfully improve over time.”

Of S and X deliveries the company reported, 15% were leased, while only 8% of Model 3s were. That is “slightly higher than Q2 levels of approximately 6% in aggregate. All else equal, this would be marginally negative,” Jonas said in a follow-up note. “The Q3 delivery number was slightly below many real-time, buy-side expectations, lending support to bears who see fundamental pressure ahead of 3Q results.”

As the company works to boost vehicle production at its Fremont, California, plant Tesla is also racing to begin building Model 3s at a $2 billion factory in Shanghai that Musk wants to begin production this quarter. The plant could begin some form of production as early as this month, according to Reuters, though it’s unclear how soon it will begin selling locally built cars to Chinese customers.

From Los Angeles, the U.S. capital of cars and congestion, I try to make sense of technology-driven changes reshaping transportation, cities and how we get around. I've

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From Los Angeles, the U.S. capital of cars and congestion, I try to make sense of technology-driven changes reshaping transportation, cities and how we get around. I've tracked global automakers, advanced vehicle tech and environmental policy for more than two decades, including 15 years at Bloomberg, and squeezed in stints in the financial and corporate worlds. What's your story?